Bad News for the Self-Employed

Fannie Mae and Freddie Mac are tightening the screws even more on self-employed borrowers as they are now requiring that underwriters review 3 months of business bank statements and not just the previous two months as required earlier. Underwriters not only scrutinize a self-employed borrower's tax returns from the last year or two, but they also scrutinize their Profit and Loss Statements for this year and also their business bank statements. Underwriters will use as "stable" monthly income the lowest income figure they calculate whether that be from tax returns, this year's Profit and Loss Statement or their last 3 months of business bank statements.